Fino Payments Bank looks to acquire fintech startups

Fino Payments Bank is looking at posting a top line of around $70 million with losses, which would be significantly lower than what were initially projected.CR Sukumar | ET Bureau | October 03, 2017, 08:57 IST

Fino Payments Bank is looking to acquire startups in the area of banking and mobile technology products and distribution platforms, apart from roping in strategic investors for the next phase of growth over the next six months.

Fino, which had begun operations as a technology company to offer services to microfinance institutions (MFIs) in 2006-07 and then transformed into a banking correspondent, started operations as India's fourth payments bank in July.

“The payments bank, which had raised about Rs 400 crore around nine months back from ICICI and BPCL, is now looking at raising another Rs 200 crore over the next 3-4 months by roping in strategic investors by diluting a minority stake,“ the bank's CEO Rishi Gupta told ET.

“Our interest will be in people (strategic investors) who will help us in technology and distribution, among others, strategic from that perspective. We may also look at private equity funds and high net worth individuals (HNIs),“ said Gupta.

Gupta said while no target companies were identified yet, the process would be done by the time Fino raises the next round of Rs 200 crore. “It may take another six months (for acquisitions) and the time also depends upon getting good company at a reasonable price.“

Fino Payments Bank is looking at posting a top line of around $70 million with losses, which would be significantly lower than what were initially projected, thanks to encouraging partnerships and business volumes, he said. Gupta said the bank was also looking at a sizeable business through inorganic route.

“We have enough funds and the extra Rs 200 crore that we are looking to raise will help us to go more aggressive on marketing and inorganic growth,“ he said, adding, “there are many banking and mobile technology companies with good technology, products and distribution network but small in size struggling for capital.“

Rishi claims that Fino is probably the only bank in the world today with 100% biometrics for physical transactions.

“A lot of people have a misconception that payments banks are only for transaction business. We feel payments banks are for all kinds of banking services and we have launched all of them - some are our own products and some are through partnerships,“ said Gupta.